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Non-Tech : Sungold Gaming International (SGGNF) -- Ignore unavailable to you. Want to Upgrade?

To: David Fedorkiw who wrote (1601)	1/15/1998 7:01:00 PM
From: John Lawrence	Read Replies (2) \| Respond to of 5164

The Nasdaq MM system virtually doubles the actual volume traded. Good question David. I'm sorry I don't have a link that would describe this for you. I can't be absolutely certain about the pink sheets, but I have read that one of the selling points for the SmallCap Market and the National Market is that the volume we see at EOD is effectively twice the number that actually change hands between one private shareholder and another. This is because the MM usually, or at least often, buys or sells into his own account, and then sells to or buys back from the client. I imagine that at this stage some of the shares are going into the MM's accounts and staying there which temporarily subtracts from the doubling effect. Nasdaq uses this as a selling point to listing companies. Nasdaq listings appear to have much higher liquidity than comparable listings on the NYSE or AMEX. I have seen studies that show that when companies move lisings from the the Nasdaq to the Amex or NYSE the average volumes and volatilities decline sharply. We have not seen the full 'hyper-liquidity' effect of the Nasdaq system yet. When SGGNF starts trading (bidding) regularly above $4 and the listing moves to the electronic SmallCap otc-bb then all the bids, asks, and MM ID's will be visible to any traders or brokers with Nasdaq Level II data feeds. The number of these is increasing daily with new cheaper Internet connections. Many people with Level II, or SOES (small order entry systems) attempt to make livings by daytrading (scalping) small points (1/8's, 1/4's, etc.). Typically daytraders only deal in very liquid stocks with higher volume than SGGNF, but all the same, I expect that when SGGNF moves to the electronic system we will see volumes and valitility increase greatly largely due to short term trading. I think we can assume there that very little of the current volume is due to short-term trading. The 'black box' pink sheet MM system kills daytraders. It would be helpful if someone could track down the links describing these effects. BTW, I have heard that it looks as though a small percentage of the buyers can be accounted for by shorts. Make what you will of that.